How to control costs if you’re having hip replacement or knee replacement surgery

Some 50 years ago, fans were rocking to “Twist and Shout.” These days, the same crowd is rolling on over to orthopedic surgeons for hip and knee replacements.

Medicare recently reported that in 2014, it paid for more than 400,000 of these operations, which cost more than $7 billion for the hospitalizations alone. The average cost for these procedures, including hospitalization and recovery, ranged from $16,500 to $33,000, depending on geographic location.

If you are contemplating one of these surgeries, you’d better work it on out or you may pay more than you should and get less than you need.

Here are 6 tips for navigating the insurance maze that can accompany these popular surgeries.

6 tips to control costs of hip and knee replacement

Don’t assume you’ve been quoted the best price.

Do the math.

Surgery location can affect price.

Think ahead when picking health care provider.

Check out reference-based pricing.

Negotiate.

1. Don’t assume you’ve been quoted the best price

Don’t take it for granted that you are getting a good or fair deal from your local health care providers. The price differences among various facilities and practitioners can be significant for the exact same thing, regardless of quality. “Some costs are enormously inflated for no discernible reason — sometimes by a factor of 10 — both regionally and in hospitals in the same region,” says Chris Duke, a senior analyst with Altarum Institute and director of its Center for Consumer Choice in Health Care.

This is especially important to consider if you have private or employer-paid insurance. It can even be a problem if you have Medicare, especially if you have selected a Medicare Advantage plan with co-pays and deductibles.

2. Do the math

Start by figuring out the costs at the health care systems you’d prefer to use. Use cost data from the Healthcare Bluebook or Guroo from competitor Health Care Cost Institute. Nationally, the Bluebook puts the total fair price for total hip replacement surgery at $27,849; total knee replacement, $27,757. Total fair price is defined as a reasonable amount for a particular medical service.

Medicare also is getting into the data game. Even if you aren’t old enough to qualify for the program, it still pays to check the government’s Hospital Compare data for overall quality information.

In April, Medicare launched a new payment model aimed at joint replacement. Under the “comprehensive care for joint replacement” plan, health care providers are being paid based on how well their patients do, as well as how much they charge. If a hospital’s costs for hip and knee replacements are less than the amounts the Centers for Medicare & Medicaid Services set for it, a hospital will earn a bonus. If its patients have complications or stay in the hospital too long, the hospital will be required to reimburse Medicare. Only 67 hospitals are participating initially, but more will soon follow.

3. Surgery location can affect price

The cost differences can be startling and give you some good ideas for stretching your money. Health Care Cost Institute Executive Director David Newman uses the difference between Palm Bay, Florida, and Miami as a good example. The average cost for hip replacement in Palm Bay is $50,029. In Miami — 175 miles south — the average cost is $28,522. If you will be charged a 20% co-pay, based on these figures, your upfront costs could range from $5,700 to around $10,000. That is a big difference for any pocketbook.

Given those kinds of price discrepancies, as long as your insurer agrees, you could pick a place for your surgery where the price is right, the care is top quality and the living is easy. “For the difference in co-pays, you could fly to Miami, put your spouse up in a hotel, then stay a few days doing your physical therapy on the beach,” Newman says.

4. Think ahead when picking health care provider

Hip and knee replacement is rarely emergency surgery. If you believe one or more of these operations is in your future, choose your health care provider and your insurance with that in mind.

Making sure that your health care system of choice is included in your insurance network is important, says Altarum Institute’s Duke. And don’t just stop with the hospital. Ask about anesthesiologists and physical therapists. “These people who are often under contract can represent the biggest pricing challenge,” he says.

While getting this kind of information may seem to be impossible, Duke says insurers and health care systems are increasingly willing to give it, especially to those who insist. “Price transparency is a hot trend, with more and more states passing legislation to implement payer price databases,” he says.

5. Check out reference-based pricing

If you have employer-paid insurance, ask if your company participates in reference-based pricing. In most cases, this kind of pricing agreement prevents the health-care provider from charging more than the total agreed-upon price for common ailments and procedures.

If that isn’t true of your company’s insurance or if you buy insurance through the Affordable Care Act or get it elsewhere, talk to your surgeon and the hospital’s administrative office. Find out whether the anesthesiologist and physical therapist likely to be assigned your case are in your network. “Get the answer in writing if you can,” Duke says.

6. Negotiate

“You’re a sucker if you buy a car without negotiating. The same thing is true of hip and knee replacement,” Duke says. “Prices are negotiable and seriously inflated.”

Even if most of the bill is being paid by an insurance company, negotiating is still important because of co-pays and other non-covered costs, he says. Flexibility in scheduling can even put the ball in your court, he adds. You may pay less if you’re willing to have the job done when the doctor and hospital have a slow period in the schedule, which results in a slowdown in their cash flow.

Remember, health care is a business. The bottom line is increasingly important to providers, and mandated cost transparency is pushing down what they can charge. As Duke says, “The situation had to change; costs have been unsustainable.”

How we make money

Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.